Gold falls after Bernanke comments
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By Jeremy Holcombe Contributing writer for Goldco Direct and End the Lie Well, we all know it can’t be good news everyday. Today Federal Reserve Chairman Ben Bernanke spoke, and gold tumbled immediately. Bernanke stated that the improvements in the United States economy may have lessened the need for more stimulus packages. Basically, he said that the Federal Reserve would not want to put any more money into the U.S. economy if it continues to perform like it is currently. On Bernanke’s comments Gold for April delivery fell by $63.70 to end up at $1,724.70 an ounce at the Comex division of the New York Mercantile Exchange earlier today. The price of gold traded as high as $1,792.30 and as low as $1,708.40 an ounce while the spot price of gold lost $60.50. During his speech before congress – the same speech he gives semi-annually, Bernake painted the picture that the pace of economic growth has been "uneven and modest by historical standards." However, he also did acknowledge that there was some improvement in the labor market and said that headwinds like Europe and a weak housing market would fade beyond 2012. So this was some good news out of the speech. "Gold market participants are taking profit taking opportunity in conjunction with the Fed Chairman's comments regarding monetary policy," said Jeff Wright, senior research analyst with Global Hunter Securities. "With the recent run up in gold and silver; no fund manager wants to be the 'Bag-Holder' if a true correction back to the $1600 range occurs.... Our thesis of gradual appreciation is still intact but with periods of volatility in both gold and silver markets. I believe longer term investors will step in to support gold and silver if the sell off continues in the coming days." While gold did drop quite a bit early on today, there is simply no real reason to think that the overall outlook of the yellow metal is in any danger. As I have stated time and time again, gold will drop with news like this, but it will also spike back up fairly quickly. I chose to interpret the Bernanke comments in a different way. Since he is stating that there would be no more Federal Reserve money pumped into the United States economy if it continued to perform like this, I took that as a sign that the economy is finally making some headway and getting back to where it needs to be. Personally, I know that I will use this price drop in gold as an opportunity to buy more at a lower price. The above article is for informational purposes only and is not a solicitation by End the Lie or Goldco Direct . It is the commentator’s opinion only and not intended for investment recommendations, and does not necessarily reflect the views of End the Lie or Goldco Direct . Any references to outside sources are believed to be accurate. Past performance is not a guarantee of future results. All commodities involve risk. Investors should consult their financial adviser before making any investment decisions.